What Is a Tax Home?

Your tax home is your main place of:

Business

Employment

Post of duty

In other words, your tax home is where you are permanently and indefinitely working as an employee or self-employed individual. This does not mean that it is your residence or domicile for tax purposes.

What If I Do Not Have a Regular Place of Business?

If you do not have a regular or main place of business because of the nature of your work, your tax home could be the place where you regularly live. If you have neither a regular business nor a regular residence, you are considered an itinerant, and your tax home is wherever you actually work.

When Do I Not Have Tax Home in a Foreign Country?

You are not considered to have a tax home in a foreign country for any period in which your residence or main place of business is in the United States. However, your residence or main place of business is not necessarily in the U.S. while you are temporarily physically in the United States, as visiting the U.S. for a short while does not automatically change the location of your tax home. Merely maintaining a residence in the United States while actually living and working in another country also does not mean that your tax home is in the U.S., whether or not your spouse or dependents use the residence.

Temporary or Indefinite Assignment

The location of your tax home often depends on whether you are there temporarily or indefinitely:

Temporary - If you are temporarily absent from your U.S. tax home, then you may be able to deduct your expenses while away from home. However, you probably would not qualify for the foreign earned income exclusion.

Indefinite - If your new work assignment is for an indefinite period, then the place you work becomes your new tax home. If the new tax home is in a foreign country and meets the other requirements, you might be eligible for foreign income tax exclusion.

What If I Cannot Figure Out My Tax Home?

International tax is an extremely complex area of the law. You may want to consult a tax lawyer who has a knowledge of tax homes and other international tax issues. An experienced tax lawyer would be able to explain your problems to you and help resolve them.